ARMED SERVICES BOARD OF CONTRACT APPEALS 

Appeal of --

United Healthcare Partners, Inc. 

Under Contract No. FA4877-12-C-0002 

APPEARANCE FOR THE APPELLANT: 

) 

) 

) 

) 

) 

APPEARANCES FOR THE GOVERNMENT: 

ASBCA No. 58123 

Mr. David D. Cooper 

CEO 

Col Matthew J. Mulbarger, USAF 

Air Force Chief Trial Attorney 

Michelle D. Coleman, Esq. 

Skye Mathieson, Esq. 

Trial Attorneys 

OPINION BY ADMINISTRATIVE JUDGE PAGE 

ON THE PARTIES' CROSS-MOTIONS FOR SUMMARY JUDGMENT 

United Healthcare Partners, Inc. (UHP) appeals from the contracting officer's 

(CO's) final decision (COFD) to terminate for cause the parties' commercial items 

contract for telephone-based nurse triage answering services. 1 The parties filed 

cross-motions for summary judgment, and each relies upon multiple bases to justify its 

motion. The government alleges that termination was warranted by UHP's failure to 

perform in accordance with the contract, whereas UHP asserts that its actions are excused 

by the government's multiple material breaches of the contract. We deny each party's 

motion. 

STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTIONS 

1. The United States Air Force (AF or government) issued Contract 

No. FA4877-12-C-0002 to UHP on 1October2011 that included a base year and four 

optional years of performance (R4, tab 1). The single contract line item number (CLIN) 

0001 required the contractor to "provide all facilities, equipment, tools, transportation, 

personnel, labor, supervision, and management to perform a 1-800 telephone-based 

Nurse Triage Answering Service on a 24/7 basis." This required the contractor to 

"provide clinical assessment and appropriate level of care support services for 

beneficiaries in the Davis-Monthan [Air Force Base, Arizona] [DMAFB] Catchment 

Area" from 1 October 2011 - 30 September 2012 for the base period. (Id. at 3) 

1 ASBCA No. 58123 is consolidated with ASBCA No. 59214, an appeal from a 

COFD denial of a claim for breach of contract damage, but the latter is not a 

subject of the cross-motions. 
2. The solicitation advised that historical data for FY I 0 indicates there were 

"19213" "Total Calls" during "Duty Hours" and "Non-Duty" hours (R4, tab 3 at 58). 

The terms "call(s)" and "all calls" are used throughout the contract (see, e.g., CLIN 

0001 and Performance Work Statement (PWS) ~~ 1.1.5, 1.1.6, 1.1.7, 1.1.8, 1.1.12 (R4, 

tab I at 3, 27-28)), and "Total Calls" is used in the solicitation (R4, tab 3 at 58). 

Neither document states whether the historical data or estimated quantity in CLIN 

0001 includes "calls" that UHP is not allowed to charge to the government. 

3. UHP's 15 September 2011 "Price Proposal" (R4, tab 3) complied with the 

solicitation requirement that prospective contractors' submissions be stated on a "price per 

call" basis (gov't mot., attach. D at 62). UHP's proposal stated the price of $12.90 per call 

(R4, tab 3 at 58). 

4. According to CLIN 0001, the contract is for the acquisition of 

"SERVICES/SUPPLIES" described as "Nurse Triage Answering Service[s]." The 

CLIN states a quantity of "19,710"; defines the unit being purchased as "Calls"; states 

the unit price as "$12.90"; and the contract "AMOUNT" as "$254,259.00." On a 

separate line below the above information, and before a summary of the work to be 

performed in accordance with the PWS, is the acronym "FFP," which indicates that 

this is a "firm fixed-price" contract. (R4, tab 1 at 3) 

5. The contract's "Performance Work Statement for Davis-Monthan 

Catchment Area Nurse Triage Services [DMCANTS]" for the "355th Medical Group 

(MDG)" (R4, tab 1 at 26) provided additional information regarding the anticipated 

telephone call volume: 

(Id. at 30) 

1.1.16. Estimated Monthly Call Volume. The 355 MDG 

estimates that total monthly calls answered by the nurse 

triage service will be approximately 1,800-2,000. 

Approximately 5% of these calls will require paging the 

on-call Life Skills provider. The number of calls will vary 

based on the number of holidays and/or base down days 

for each month, and on seasonal flu/cold patterns. 

6. The contract contains standard Federal Acquisition Regulation (FAR) clauses 

that are incorporated by reference. These include FAR 52.232-1, PAYMENTS (APR 1984); 

FAR 52.233-1, DISPUTES (JUL 2002)-ALTERNATE 1(DEC1991); and FAR 52.246-4, 

INSPECTION OF SERVICES-FIXED-PRICE (AUG 1996) (R4, tab 1 at 7-8). The contract 

does not include, by reference or full text, either FAR 52.216-21, REQUIREMENTS or 

FAR 52.216-22, INDEFINITE QUANTITY (id. at 7-8). 

2 
7. The contract also contains two different standard clauses which authorize the 

government to terminate where the contractor fails to perform. In relevant part, 

FAR 52.249-8, DEFAULT (FIXED-PRICE SUPPL y AND SERVICE) (APR 1984 ), incorporated 

by reference, provides in~~ (a)(l) and (a)(l)(i) for termination where the contractor fails 

to "Deliver the supplies or to perform the services within the time specified in this 

contract or any extension" without a cure notice (52.249-8(a)(2)). (R4, tab 1 at 8) 

8. The second clause allowing the government to terminate the contract is 

FAR 52.212-4, CONTRACT TERMS AND CONDITIONS-COMMERCIAL ITEMS (JUN 2010), 

which is incorporated by full text (R4, tab 1at8-12). In relevant part,~ (a) 

Inspection/ Acceptance, states that the contractor "shall only tender for acceptance 

those items that conform to the requirements of this contract. The Government 

reserves the right to inspect or test any supplies or services that have been tendered for 

acceptance." (Id. at 8) Paragraph (g) Invoice,~~ (l)(iv) requires the contractor's 

invoice to include a "Description, quantity, unit of measure, unit price and extended 

price of the items delivered." Paragraph (i), Payment, provides at ~ ( 1) that "Payment 

shall be made for items accepted by the Government." (Id. at 8-9) Paragraph (m), 

Termination for Cause, allows the government to "terminate this contract, or any part 

hereof, for cause in the event of any default by the Contractor, or ifthe Contractor fails 

to comply with any contract terms and conditions, or fails to provide the Government, 

upon request, with adequate assurances of future performance." If the contract is 

terminated for cause, "the Government shall not be liable to the Contractor for any 

amount for ... services not accepted .... If it is determined that the Government 

improperly terminated this contract for default, such termination shall be deemed a 

termination for convenience." (Id. at 11) 

9. Contract clause FAR 52.212-4(d), Disputes, provides in relevant part that: 

This contract is subject to the Contract Disputes Act of 

1978, as amended (41 U.S.C. 601-613). Failure of the 

parties to this contract to reach agreement on any request 

for equitable adjustment, claim, appeal or action arising 

under or relating to this contract shall be a dispute to be 

resolved in accordance with the clause at FAR 52.233-1 

Disputes, which is incorporated herein by reference. The 

Contractor shall proceed diligently with performance of 

this contract, pending final resolution of any dispute 

arising under the contract. 

(R4, tab 1 at 8) 

10. The language of FAR 52.212-4(d) is consistent with contract provision 

FAR 52.233-1, DISPUTES (JUL 2002HALTERNATE I), which was incorporated by 

reference. The latter clause states in~ (i) that "The Contractor shall proceed diligently 

3 
with performance of this contract, pending final resolution of any request for relief, 

claim, appeal, or action arising under or relating to the contract, and comply with any 

decision of the Contracting Officer." (R4, tab I at 7) 

11. Contract clause FAR 52.246-4, INSPECTION OF SERVICES-FIXED-PRICE 

(AUG 1996) (R4, tab I at 7), is incorporated by reference and provides in relevant part: 

( e) If any of the services do not conform with 

contract requirements, the Government may require the 

Contractor to perform the services again in conformity 

with contract requirements, at no increase in contract 

amount. When the defects in services cannot be corrected 

by reperformance, the Government may (I) require the 

Contractor to take necessary action to ensure that future 

performance conforms to contract requirements and 

(2) reduce the contract price to reflect the reduced value of 

the services performed. 

( f) If the Contractor fails to promptly perform the 

services again or take the necessary action to ensure future 

performance in conformity with contract requirements, the 

Government may (I) by contract or otherwise, perform the 

services and charge to the Contractor any cost incurred by 

the Government that is directly related to the performance 

of such services or (2) terminate the contract for default. 

12. CLIN 000 I required UHP to perform in accordance with the PWS for 

DMCANTS for the 355th MDG (R4, tab I at 3). PWS ~I.I.I, Background, describes 

DMCANTS as a "key entry point into the Military Health System." The PWS 

provided in relevant part: 

1.0. DESCRIPTION OF SERVICES/GENERAL 

INFORMATION 

1.1.2. Scope. The contractor shall provide a 1-800 

telephone-based nurse triage service for the 

Davis-Monthan Catchment Area, to perform clinical 

assessment and appropriate level of care support services 

for the TRICARE program, 24 hours per day, 7 days a 

week, including all holidays. All calls into the DMCANTS 

shall be answered by Registered Nurses [RNs], following 

nationally recognized and physician approved clinical 

4 
protocols and guidelines for symptom-based calls. The 

contractor shall gather information from the nurse triage 

service calls and enter the information into a database to 

show assessments, documented resolution, and/or further 

action needed from a Primary Care Manager (PCM) or the 

Chief of the Medical Staff. The contractor shall e-mail or 

fax patient caller information to the TRICARE Operations 

and Patient Administration (TOPA) flight located at 

DMAFB. The contractor shall communicate DMCANTS 

activity with the TOPA Flight Commander daily. Items 

requiring necessary follow-up from the TOP A Flight 

Commander, PCM, or Chief of the Medical Staff will be 

identified by the contractor. 

(Id. at 26) (Emphasis added) 

13. PWS ii 1.1.5, Data Collection, provides that "[t]he contractor shall use a 

computer software program that will collect data that can collate calls by type of call 

received and information delivered. Every call shall be logged into the database and 

contain the following minimum information" that includes the date, time of call, patient 

name, sponsor's name, last 4 numbers of the sponsor's social security number, age, date 

of birth, address, telephone number, primary care physician/surgeon, current medications, 

allergies, pertinent surgical history, primary symptom/duration, nursing assessment, 

protocol used, disposition, reason for disposition, patient/caller understanding, 

patient/caller intended action, and nursing notes. (R4, tab 1 at 27) (Emphasis added) 

14. Additional PWS requirements included the following: 

1.1.6. Telephone Response Time. The contractor shall 

answer patient calls in real time, preferably in less than 

5 minutes. 

1.1. 7. Call Summaries. The contractor shall provide 

comprehensive documentation of all calls, to include 

patient demographics, caller concern, primary symptom, 

protocol used, and disposition for each call. A summary of 

calls from the previous call period and each individual 

patient's triage documentation will be provided to the 

TOP A Flight Commander for distribution to the PCM team 

at the beginning of each duty day or to the Chief of the 

Medical Staff as requested. The contractor shall provide 

monthly comprehensive documentation of all calls taken to 

include patient demographics, caller concern, primary 

symptom, protocol used, and disposition for each call to 

5 
the Government Contracting Officer Representative 

(COR). This communication will be in a written format to 

facilitate follow-up with the referral management nurses 

and Military Treatment Facility (MTF) PCM teams as 

appropriate. The preferable method is via password 

protected e-mail to ensure Health Insurance Portability and 

Accountability Act (HIP AA) protocols are maintained. 

1.1.8. Call Statistics Reporting. The contractor shall 

submit a monthly status report to the TOP A Flight 

Commander no later than the 1 oth working day of each 

month. The monthly report shall include comprehensive 

analyses of all activity. 

1.1.9.1. Quality Control Plan. The contractor shall 

establish, implement, and maintain a Quality Control Plan 

to ensure all services are provided as specified in this 

contract .... The contractor shall submit the Quality 

Control Plan to the Contracting Officer upon contract 

award for review .... 

1.1.10. General Enrollment Screening Protocols. The 

contractor shall answer all patient calls with "3 5 5th 

Medical Group." The contractor shall first ask if the 

patient is an enrolled beneficiary of the 355 MDG at 

DMAFB. If the answer is "no'', the contractor shall inform 

the patient that the service is only for enrolled 

beneficiaries, and advise the patient to call their PCM or 

TRICARE office in their assigned region .... 

1.1.14. Other Support. The contractor shall provide 

sufficient technical information and a valid phone number, 

so the 355 MDG appointment and information line will 

have a working link to the nurse triage service. 

(R4, tab 1 at 27-29) (Emphasis added) 

15. The government had responsibility for making follow-up calls to patients 

using information provided by the contractor that was obtained from incoming calls from 

enrolled beneficiaries (see, e.g., R4, tab 1 at 26-27, 30, PWS irir 1.1.2, 1.1.7, 1.2.6). 

6 
16. PWS ~ 2.0, Services Summary, set forth performance objectives, contract 

references, and performance thresholds for each objective. UHP was required to meet 

a "Performance Threshold" of"l00%" for PWS ~~ 1.1.2, 1.1.3, 1.1.5.1, 1.1.6, 1.1.7, 

1.1.8, 1.2.1.2, 1.2.4, 1.2.6. (R4, tab 1 at 31-32) 

17. UHP was required to obtain "Protected Health Information" (PHI), which 

is defined as "information that was received from or created on behalf of' the enrolled 

beneficiaries of government's 355th MDG (R4, tab 1 at 44). The contractor was 

required to provide this PHI to the government in various periodic reports (see, e.g., id. 

at 26-31, especially PWS ~~ 1.1, 1.1.5, 1.1.7, 1.1.8). Because PHI is protected by 

HIP AA and other legal requirements, the contract required the parties to enter into a 

"Business Associate Agreement" that governed the contractor's handling of sensitive 

PHI and its provision of that information to the government (id. at 32, 44-48). This 

agreement at~ 11.b. states that UHP must make the PHI "available to 355 MDG or a 

requesting individual" and at~~ IV.b. and V.d. to disclose PHI to the government for 

data aggregation purposes (id. at 45-47). UHP furnished the government with an 

"executed" Business Associate Agreement on 1 October 2011. The agreement placed 

no limit upon the PHI which UHP was to furnish to the government. (R4, tab 6) 

18. In several places the contract informed UHP that it was required to furnish 

nurse triage services only to enrolled beneficiaries of the 355th MDG in the DMAFB 

Catchment Area and to redirect other callers (see, e.g., R4, tab 1 at 3, 26, 28, 30, CLIN 

0001, PWS ~~ 1.1.1, 1.1.10). PWS ~ 1.2.6, Hours of Operation, told UHP to provide 

services "24 hours per day, 7 days a week and on all holidays" and stated that "No gaps 

in contractor coverage of the nurse triage services are permissible." This provision also 

stated that "Non-triaged calls requesting 355 Medical Group or beneficiary information 

will not be charged to the MTF." (Id. at 30) Read together, these contract provisions 

inform UHP that it should expect to answer, but not triage, incoming calls from 

non-beneficiaries for which it would not be compensated (id. at 3, 26, 28, 30). 

19. UHP does not dispute that it maintained two telephone lines from commercial 

provider Vonage in performing the contract (gov't mot., attachs. A and B). In accordance 

with PWS ~ 1.1.14, Other Support (R4, tab 1at29), UHP received calls made directly to 

these lines and those transferred from the government's medical clinic main appointment 

line (gov't mot., attach. F, Deel. ofTSGT Diana S. Habel, Group Practice Manager for the 

instant contract from 1 October 2011-6 February 2012 (Habel decl.) at 1). According to 

Vonage records, "David Cooper" obtained service for a local telephone number a toll-free 

number from 30 September 2011 until 29 February 2012 (gov't mot., attach. A at 2, 

attach. B). Although there were voluminous incoming calls to the local number (id., 

attach. A, passim), only three calls are shown during this period to the toll-free number; 

none of the latter are from the government's medical clinic main appointment line (id., 

attach.Bat 4). Calls transferred from the government's medical clinic main appointment 

line show the incoming number as "restricted" (id., attach. A, passim). 

7 
20. The government programmed UHP's local telephone number into an 

automatic call distributor system known as the "T-Metrics ACD system." The system 

allowed the government to track the number of incoming calls to this telephone number 

and to check the number of calls transferred from the government's clinic line to UHP's 

local telephone line. (Habel decl. at 1-2; see also R4, tabs 23, 34, 40 (printouts of the 

T-Metrics system showing transfers from the clinic to UHP's local telephone line)). 

21. The contractor was required to submit monthly reports pertaining to its contract 

performance to the government. UHP's monthly report for "10/0112011-10/31/2011" (R4, 

tab 15) provided the following categories and corresponding "Monthly Totals"; "Number of 

355th Med Group Beneficiaries" (413); "Total Monthly Immediate UC [Urgent Care]/ER 

[Emergency Room]/SelfTx Guidance" (413); "Total PRP Members" (O); Total PRP 

Dependents (O); "Total non-PRP" (413); "TTL QM f/u/**Gen Q&A/**PT Ed Volume" 

(1,752); and "Total Patient Call Volume" (2,165) (id. at 102). According to the 

government, the term "non-PRP" denotes 355th MDG beneficiaries (gov't mot. at 13). 

UHP's October 2011 monthly report contains a summary of the "Daily Detailed Report" for 

each day of that month using the categories listed above and "Daily Totals" for each (R4, 

tab 15 at 103-11 ). The record does not disclose the nature of calls labeled by UHP as "TTL 

QM f/u/**Gen Q&A/**PT Ed Volume." 

22. The government's first Corrective Action Report (CAR), No. 01-2011 2 advised 

UHP of unacceptable performance and gave a suspense date of21November2011 to 

correct the deficiencies (R4, tab 14). CAR No. 01-2011 cited shortcomings with PWS 

~~ 1.1.5, Data Collection and 1.1.7, Call Summaries (id. at 98). UHP was told that 

"Triage reports are only being sent on patients who were referred to Urgent Care or 

Emergency [and] these only accounts [sic] for 20% of total calls received." The 

government stated that "Patient information is incorrect on 50% of the Triage reports 

received; [sic] to the point that patients can't be identified." The government assessed the 

impacts of this deficient performance as a "High Patient Safety Risk" due to a "gap of 

continuity of care" and a "HIP AA Violation" because "incorrect patient information will 

lead to wrong information in patient record or inappropriate release." UHP was warned 

that "incorrect patient demographics will cause billing mistakes and patients receiving a 

bill when a referral should have been submitted." The contractor was told of "Patient 

dissatisfaction" because "Triage Nurses are not thorough and difficult to understand with 

extreme delay in follow-up/returned calls." (Id. at 99) 

23. UHP on 22 November 2011 wrote the CO that it "intends to challenge [CAR 

No. 01-2011] and the premise(s) under which [it] was filed." The contractor characterized 

deficiencies cited in the CAR as "false and/or misleading." UHP contended that it 

understood that the parties had "collectively reached an agreement" that certain patient 

data called for by PWS ~ 1.1.5 "violates law, regulations or public safety." (R4, tab 20 

2 The date of issue of CAR 01-2011 is not in the record. 

8 
at 121) The record does not contain, nor does UHP allege, that it further challenged or 

responded to CAR No. 01-2011. The declarations of Gary Douglas Kimmel, Chief of 

Base Acquisition Flight for Contracting, and David R. Harrison, CO, deny that the parties 

reached such an agreement. 

24. The government on 23 November 2011 issued a "Show Cause" notice to 

UHP, and advised the contractor that "the Government considers your failure to 

maintain the standards outlined in the [PWS] in the aforementioned contract 

unacceptable." The notice warned that "unless this condition is addressed within 

14 calendar days after receipt of this notice," the government "may terminate for 

default" under "contract clause 52.249-8 'Default (Fixed-Price Supply and Service)."' 

Specific concerns were stated as UHP' s failures to respond to the CAR of 

14 November 2011; meet performance standards under PWS, 1.1.5; and "provide 

Data Collection IA W contract terms and conditions" which "placed patients in an 

unsafe situation." (R4, tab 21) 

25. On 25 November 2011, the government paid UHP's invoice for $27,928.50 

for services rendered during October 2011 (R4, tab 11). 

26. The government continued to contest UHP's reported call volumes for 

want of documentation and UHP continued to deny that the contract required this level 

of detailed information to support its invoices. UHP's revised Monthly Report for 

1-30 November 2011 (R4, tab 22) stated that the contractor handled 451 calls from 

355th Medical Group beneficiaries plus 1,423 calls from callers identified only as 

"TTL QM f/u/**Gen Q&A/**PT Ed Volume" for a "Total Patient Call Volume" of 

1,874 (id. at 137). The revised report carries the "NOTE" that "Invoicing information 

is derived from automated telecommunication systems daily count and is NOT linked 

to Patient Database[s] or medically categorized Patient Volume Statistic[s]" (id.). 

27. The government issued a second CAR to UHP on 2 December 2011 

(R4, tab 24). Similar to the first CAR (R4, tab 14), CAR No. 02-2011 referenced PWS 

,, 1.1.5 and 1.1. 7; specified the contractor's alleged "UNACCEPTABLE 

PERFORMANCE" and resulting adverse impacts; and again questioned whether UHP 

was billing for calls that were not compensable under the contract (R4, tab 24 at 212-13). 

UHP was provided a summary of errors in its reported data (id. at 215-220), and given a 

suspense date of 8 December 2011 to respond (id. at 212). The government issued a third 

CAR, No. 03-2011, on 7 December 2011 and required UHP to respond to the cited 

deficiencies by 14 December 2011 (R4, tab 27). The government issued a fourth CAR, 

No. 04-2011, on 12 December 2011 and gave UHP until 19 December 2011 to respond 

(R4, tab 28). 

28. UHP was issued a fifth CAR, No. 05-2011, on 14 December 2011. The 

government cited PWS ,, 1.1.2 and 1.1.6 as contract requirements that were not being 

met; specified the contractor's performance shortcomings and adverse impacts to 

9 
patients; and summarized problems with appellant's data. Additional issues raised in 

this CAR were that "Patient calls are being answered by a machine system vs. an RN 

as stated in [PWS in 1.1.2" and thus "are not received in real time [as required by PWS 

il1 1.1.6." The government contended that patients were experiencing unacceptably 

lengthy delays and failures to have calls returned, and gave UHP until 20 December 

2011 to respond. (R4, tab 31) 

29. On 22 December 2011, the government issued a sixth CAR, No. 06-2011, and 

gave UHP until 29 December 2011 to respond to the deficiencies cited therein. The 

government cited PWS iii! 1.1.2, 1.1.6 and 1.1.7 as of concern and reiterated UHP's 

performance shortcomings and associated negative patient impacts. Additionally, the 

government noted that UHP was providing only the last four digits of a patient's social 

security number, which made it difficult to identify the person. (R4, tab 31) 

30. The record does not show, nor does appellant assert, that UHP responded to 

the government's CARs after the first one (R4, passim; app. mot. and opp'n, passim). 

31. Between 16 November and 23 December 2011, the government repeatedly 

sought UHP's assistance in identifying certain patients after the government was 

unable to do so due to incorrect or insufficient data in the contractor's reports. UHP 

variously attributed the errors to the patient, the government, or to mistakes in its 

reports. (R4, tabs 16-19, 25-26, 30, 32) 

32. UHP's monthly report for 1-31December2011 reported a "Total Patient 

Call Volume" of 1,928 calls (R4, tab 33). This included 571 calls received from "355th 

Med Group Beneficiaries" and 1,357 calls labeled "TTL QM f/u/**Gen Q&A/PT Ed 

Volume" (id. at 247). 

33. In a 17 January 2012 email, the government told UHP that it was "holding up 

acceptance of [the contractor's] invoice's [sic] for Nov and Dec pending verification of 

call volume." The government asked the contractor for the "rational[e] for the disparity 

between the government's reported call volume and your company's reported call 

volume" so the "invoices [could be] processed for payment as soon as possible." (R4, 

tab 35) On 26 January 2012, the government rejected UHP's December 2011 invoice, 

citing discrepancies between call volumes asserted and those documented (R4, tab 37). 

34. The contractor's 31 January 2012 response criticized the government's 

reasons for rejecting UHP's invoices (R4, tab 38). UHP stated that "the submission of 

the Monthly Clinical Statistics Report is NOT stipulated to, as a contingency to invoice 

approval in the [PWS] or in the Contract language, nor is it (typically) a true and accurate 

representation for accounting and invoicing purposes" (id. at 291). UHP advised: 

At this juncture, and given the apparently deliberate and 

creative efforts to suspend compensation to our Firm, 

10 
(Id. at 292) 

utilizing procedures outside the prescribed parameters and 

guidelines under FAR and DCMA for Suspension and 

Notification of payment for Professional Contracted 

Services, our Firm is unable to continue to provide services 

to [DMAFB] should the suspension of payment not be 

rectified by Close of Business February 3, 2012. Should 

this not be possible, our Firm will have no other recourse 

but to suspend or cancel services as of that time, as a result 

of actions and inaction taken by your Administration, 

placing our Firm in an untenable fiscal position. 

35. The government on 1February2012 notified UHP that its "response did 

not provide any facts or figures which would allow us to remedy the discrepancy in 

call volume generated by your company and government records." Among other 

things, the government requested that appellant provide the data required by the PWS. 

UHP was told that its "monthly status report does not capture the minimum 

information required by the contract." This left the government unable "to verify the 

call numbers you are submitting as accurate since the reports do not provide 

comprehensive documentation." The CO cautioned UHP that its threat to cancel or 

suspend services unless it was paid by 3 February 2012 could make the contractor 

liable for costs including reprocurement. (R4, tab 41) 

36. On 2 February 2012, the government issued CAR No. 01-2012, based on the 

contractor's failure to comply with PWS ~~ 1.1.5, 1.1.6, 1.1.7, 1.1.8, 1.[1].9, and 1.2.5 

and required UHP to respond by 9 February 2012 (R4, tab 42). On 2 February 2012, 

appellant replied that "The Contract does not stipulate to ANY specific requirement for 

accounting verification or justification purposes with exception to" using the 

government's automated Wide Area Workflow invoicing system "as an accounting 

representation for billing and compensation." UHP reasserted that due to the 

government's continued "suspension of compensation to our Firm for Triage Services 

rendered, now (3) three month[s] to date, we have no option but to suspend all services 

to Davis-Monthan Air Force Base immediately and until it can be determined, if a 

resolution can be reached." (R4, tab 43) (Emphasis added) 

37. UHP's monthly report for 1-31 January 2012 (R4, tab 39) stated that it had 

responded to a total of 1, 7 5 3 calls, which included 610 calls from "3 5 5th Med Group 

Beneficiaries" and 1,143 calls from "TTL QM f/u/**Gen Q&A/**PT Ed Volume" (id. 

at 293). On 7 February 2012, the government rejected UHP's invoice dated 

6 February 2012 for work claimed for January 2012 because it was unable to verify the 

call volume asserted by the contractor (R4, tab 47). 

11 
38. The DMAFB contracting office notified Ms. Habel on 2 February 2012 that 

UHP had discontinued service, and she received complaints that the government's 

clinic appointment line clerks were unable to transfer callers seeking nurse triage 

services to UHP's number. Ms. Habel at 3:56 p.m. that day called the clinic's 

appointment line from her work number; after her call was transferred to UHP's triage 

line, the phone rang twice then beeped continuously until she hung up. She tried to 

access appellant's nurse triage services line from her cell phone at 5:46 p.m. but was 

again unsuccessful. Upon verifying that UHP's phone line was not operable, 

Ms. Habel put in place a contingency plan for government nurses to furnish patient 

services until a reprocurement contractor could take UHP's place. (Habel decl. at 3-4) 

39. The CO prepared an undated "DETERMINATION AND FINDINGS" 

recounting factors considered in "determin[ing] whether to terminate [UHP's] contract 

for cause in accordance with FAR 49-402-3(f)." The CO concluded that "it is in the 

best interest of the Government to terminate this contract for cause (default)." The CO 

stated that UHP "has not [met] performance standards identified within [PWS irm 1.1.2, 

1.1.5, 1.1.6, 1.1.7, 1.1.8, and 1.1.9" and detailed appellant's performance deficiencies. 

The government also noted that, other than "their single email of 22 Nov 2011," the 

contractor has failed to respond to the CARs. The CO said that nurse triage services 

were "mission essential" and "a 24/7 requirement [that] does not lend itself to any break 

in service." (R4, tab 36) The CO's 3 February 2012 memorandum for record focused 

upon UHP's repeated assertions that it would cease performance unless paid. He stated 

that "Faced with the disruption of services, the [355th MDG] put a contingency plan in 

place to have [government staff] man the Nurse Triage line" after UHP's telephone 

lines became inoperative. (R4, tab 45) 

40. The COFD of 6 February 2012, entitled "NOTICE OF TERMINATION 

FOR CAUSE" (R4, tab 46), notified UHP that the subject contract was terminated in 

accordance with "contract clause 52.249-8 [Default (Fixed-Price Supply and 

Service]." The CO cited UHP's "failure to maintain the standards" set forth in PWS 

iii! "1.1.2, 1.1.5, 1.1.6[,] 1.1.7, 1.1.8, and 1.1.9." (Id. at 361) 

DECISION 

I. Standards for Summary Judgment 

Summary judgment is an efficient measure for resolving suits in which there are 

no disputed material facts and the movant is entitled to judgment as a matter of law. 

Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390 (Fed. Cir. 1987); 

FED. R. CIV. P. 56. "A movant for successful summary judgment must show, based 

solely upon the record now before us and without benefit of a hearing that there is 

sufficient and uncontroverted evidence to meet its evidentiary obligation as defined by 

law and precedent." Osborne Construction Co., ASBCA No. 55030, 09-1 BCA 

if 34,083 at 168,512. "Summary judgment is appropriate when, drawing all reasonable 

12 
inferences in favor of the nonmovant, there is 'no genuine dispute as to any material 

fact and the movant is entitled to judgment as a matter of law.'" Spectrum 

Pharmaceuticals, Inc. v. Sandoz Inc., 802 F.3d 1326, 1333 (Fed. Cir. 2015) (citing 

FED. R. CIV. P. 56(a)); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). 

While "we determine whether disputed facts are present, the Board will not at this 

juncture serve as arbiters to resolve controversies nor weigh evidence or make 

determinations of credibility." Osborne, 09-1 BCA, 34,083 at 168,513 (citing Liberty 

Lobby, 477 U.S. at 248). 

Although both parties move for summary judgment and assert there are no 

disputed material facts regarding their respective legal positions, they interpret the 

contract and events differently. "Merely because a party has moved for summary 

judgment and avers there are no genuine issues of fact precluding its recovery does not 

mean that it 'concede[s] that no issues remain in the event [that its] adversary's theory 

is adopted.'" We evaluate each cross-motion "separately on its merits, and all 

reasonable inferences are drawn in favor of the defending party; the Board is not 

bound to' grant judgment as a matter of law for one side or the other.'" Osborne, 09-1 

BCA, 34,083 at 168,513 (quoting Mingus, 812 F.2d at 1391). 

"Substantive law dictates the parties' relative burdens, and defines those 

'material' facts that may affect the outcome of a particular cause of action." Osborne, 

09-1 BCA, 34,083 at 168,512 (citing Liberty Lobby, 477 U.S. at 249-50). As this 

appeal is grounded in an allegedly wrongful contract termination, substantive law 

governing terminations controls. A termination for default is a drastic sanction that 

should be imposed "only for good grounds and on solid evidence." JD. Hedin 

Construction Co. v. United States, 408 F.2d 424, 431 (Ct. Cl. 1969). The government 

bears the burden of proving that the termination was justified, "regardless of whose 

'claim' is being asserted." Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 765 

(Fed. Cir. 1987). If the government establishes a prima facie case of the contractor's 

default, then the contractor must show that the default was excusable within the meaning 

of the Default clause or was caused by the government's material breach. Military 

Aircraft Parts, ASBCA No. 59978, 15-1BCA,36,101at176,258. 

II. Controlling Contract Termination Provision 

As a preliminary matter, we note that this firm-fixed-price, commercial items 

contract contains two clauses that permit the government to terminate for default or cause 

(SOF, 7). These are FAR 52.249-8, DEFAULT (FIXED-PRICE SUPPLY AND SERVICE 

(APR 1984); and FAR 52.212-4, CONTRACT TERMS AND CONDITIONS-COMMERCIAL 

ITEMS (JUN 2010)3 (SOF ,, 7-8). FAR 52.249-8(a)(l)(i) states that the government may 

"terminate this contract in whole or in part if the Contractor" fails to "perform the 

3 The Board's decision in SWR, Inc., ASBCA No. 56708, 15-1 BCA, 35,832, provides a 

thorough historic perspective of federal procurement of Commercial Items. 

13 
services within the time specified in this contract," and at~ (a)(2) that the government 

should provide the contractor with a 10-day opportunity to cure. FAR 52.212-4(m) 

authorizes the government to terminate the contract "for cause in the event of any default 

by the Contractor, or if the Contractor fails to comply with any contract terms and 

conditions, or fails to provide the Government, upon request, with adequate assurances of 

future performance." The latter clause does not require that the government give the 

contractor advance notice or opportunity to cure. See, e.g., Gargoyles, Inc., ASBCA 

No. 57515, 13 BCA ~ 35,330. 

According to the government's 6 February 2012 COFD, the contract was 

terminated in accordance with FAR 52.249-8 due to UHP's failure to maintain the 

standards required by the PWS, specifically~~ 1.1.2, 1.1.5, 1.1.6, 1.1. 7, 1.1.8, and 

1.1.9. (SOF ~ 40). However, the subject line of the COFD states that it is a "NOTICE 

OF TERMINATION FOR CAUSE," language that is consistent with FAR 52.212-4(m) 

and not FAR 52.249-8, which focuses upon the term "default." 

The Board has addressed the confusion that may result from the government's 

insertion of both FAR 52.249-8 and FAR 52.212-4 in a commercial items contract. It is 

appropriate to determine which provision controls, as commercial items contracts are 

unique in government contracting. The "principles that apply under the FAR clauses 

that govern termination for default apply with equal force under the termination for 

cause provision of the commercial items clause." Free & Ben, Inc., ASBCA 

No. 56129, 11-1BCA~34,719 at 170,952 (citing General Injectables & Vaccines, Inc., 

ASBCA No. 54930, 06-2 BCA ~ 33,401at165,593, aff'd, 519 F.3d 1360 (Fed. Cir. 

2006), reh 'g denied, 527 F.3d 1375 (Fed. Cir. 2008)). According to FAR 12.403, 

Termination,~ (a): 

[T]he paragraphs in 52.212-4 entitled "Termination for the 

Government's Convenience" and "Termination for Cause" 

contain concepts which differ from those contained in the 

termination clauses prescribed in Part 49. Consequently, 

the requirements of Part 49 do not apply when terminating 

contracts for commercial items and contracting officers 

shall follow the procedures in this section. Contracting 

officers may continue to use Part 49 as guidance to the 

extent that Part 49 does not conflict with this section and 

the language of the termination paragraphs in 52.212-4. 

Thus, "based upon the provisions of paragraph (m) of FAR 52.212-4, the government 

has the right to terminate for cause in the event of 'any default' by appellant, or upon 

appellant's failure 'to comply with any contract terms and conditions,' or upon 

appellant's failure to 'provide ... adequate assurances of future performance."' 

Gargoyles, 13 BCA ~ 35,330 at 173,412. We find that FAR 52.212-4 ~ (m) is the 

controlling termination clause in the instant contract. 

14 
III. The Parties' Motions for Summary Judgment 

The parties' divergent perspectives are reflected in the bases asserted to justify 

the motions (gov't mot. and app. mot.) and are repeated in the oppositions (gov't opp'n 

and app. opp'n) and the government's reply to appellant's opposition (gov't reply). For 

purposes of judicial economy, we consider all relevant submissions in analyzing the 

parties' positions on specific issues. 

A. The Government's Motion for Summary Judgment 

The government advances three principal arguments in support of its motion, two 

of which are cited in the government's 6 February 2011 Notice of Termination for Cause, 

which relied upon FAR 52.249-8, DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) 

(APR 1984) as authority for the CO's action. First, UHP anticipatorily repudiated the 

contract through unequivocal statements on 31 January and 2 February 2012 that it would 

cease performance immediately and indefinitely unless promptly paid. Second, UHP 

then allegedly materially breached the contract when, rather than correcting performance 

deficits noted in the CARs or continuing services while disputing the issues in 

accordance with the contract's Disputes clause, the contractor abandoned performance on 

2 February 2012 by rendering inoperable the telephone lines used for nurse triage 

services. (Gov't mot. at 23-24) 

The government urges a third basis to substantiate the termination, which was not 

explicitly stated in the termination notice. It argues that UHP's discontinuing services 

violated PWS ~~ 1.1.2 and 1.2.6, which required that the contractor provide nurse triage 

services "24 hours per day, 7 days a week, including all holidays." (Gov't mot. at 35) The 

government asserts that UHP also "failed to meet the 100% performance threshold for 

[PWS ~] 1.1.7'' to "provide call summaries for all calls" (id. at 36). It says that while 

"UHP only provided daily reports for calls referred to Urgent Care or Emergency," the 

contractor "also had an obligation under the contract to provide documentation for all calls 

meaning all 355th MG beneficiary calls requiring clinical assessment." The government 

asserts that UHP's failure "to meet even one of the 100% performance thresholds" stated in 

PWS ~ 2.0 "is a material breach of the PWS and thus justified termination" even though 

this deficiency was not "explicitly cite[d]" in the COFD. (Id. at 37) 

1. Alleged Anticipatory Repudiation of the Contract by UHP 

FAR 52.212-4(m) allows the government to terminate the contract for cause where, 

among other things, the "Contractor fails to comply with any contract terms and 

conditions, or fails to provide the Government, upon written request, with adequate 

assurances of future performance." The government bears the initial burden of proving 

that its termination of a commercial items contract for cause is justified under the standard 

set forth in this clause. Dace Enterprises, LLC, ASBCA No. 57984, 13 BCA ~ 35,451 

15 
at 173,846 (citing Genome-Communications, ASBCA Nos. 57267, 57285, 11-1 BCA 

~ 34,699 at 170,889). Deciding whether a contractor anticipatorily repudiated the contract 

is "a legal determination susceptible to summary judgment ifthere are undisputed facts 

supporting a positive, definite, unconditional and unequivocal intention to repudiate." 

Vinyl Technology, Inc., ASBCA No. 47967, 97-1BCA~28,974 at 144,298 (citing Scott 

Aviation, ASBCA No. 40776, 91-3 BCA ~ 24,123 at 120,726). Used "[i]n this context, 

'unconditional' means without imposing a condition the opposing party has no duty to 

perform." Vinyl Technology, 97-1BCA~28,974 at 144,298 (citing Amexicana Corp., 

ASBCA No. 14417, 71-1 BCA ~ 8886 at 41,301, aff'd on recon., 71-2 BCA ~ 8990). 

We find that undisputed material facts establish that UHP anticipatorily repudiated 

the contract by unequivocally communicating on 3 1 January and 2 February 2012 that it 

intended to stop work unless the government paid its invoices by 3 February 2012. The 

government had refused to pay the invoices because it believed that UHP had not 

complied with the contract and had failed to document "all calls" for which it invoiced 

the government. (SOF ~~ 22-24, 26-29, 31, 33-36) The government was within its rights 

to refuse to pay the contractor where it regarded the work as unacceptably performed. 

A contractor is generally required to continue performance as directed by the 

government, pending resolution of the parties' dispute. "If the contractor believes the 

[government's] interpretation erroneous, the determination may be appealed through the 

claims procedure." Essex Electro Engineers, Inc., ASBCA No. 49915, 02-1 BCA 

~ 31, 714 at 156,699. In short, "Government contractors must perform and then argue 

about the amount of the equitable adjustment at some later time." Benju Corp., ASBCA 

No. 43648 et al., 97-2 BCA ~ 29,274 at 145,655 (quoting S. Rep. No. 95-1118, 95th 

Cong., 2d Sess. 32, reprinted in 1978 U.S.C.C.A.N. 5235, 5266). 

When the government responded to UHP on 1February2012 and reminded 

appellant of its contractual obligations, UHP gave no assurances that it would continue 

while disputing the government's refusal to pay invoices. Instead, the contractor said 

that, due to the government's continued "suspension of compensation to our Firm for 

Triage Services rendered, now (3) three month[s] to date, we have no option but to 

suspend all services to [DMAFB] immediately and until it can be determined, if a 

resolution can be reached." (SOF ~~ 35, 36). UHP's declaration of intent to cease 

performance justified the CO's decision to terminate the contract for cause on the basis 

of anticipatory repudiation. "[I]n order for a default termination to be sustained, the CO 

need only be found to have been 'justifiably insecure about the contract's timely 

completion."' Free & Ben, 11-1 BCA ~ 34, 719 at 170,954 (citing FFR-Bauelemente + 

Bausanierung GmbH, ASBCA No. 52152 et al., 07-2 BCA ~ 33,627 at 166,557). The 

anticipatory repudiation of a contract is not limited to "cases of express and unequivocal 

repudiation of a contract." Rather, a contractor's anticipatory repudiation may be found 

where "reasonable grounds" support the belief that the other party "will breach the 

contract," and a "demand [for] adequate assurance of due performance" is not met. 

Danzig v. AEC Corp., 224 F.3d 1333, 1337-38 (Fed. Cir. 2000), cert. denied, 532 U.S. 

995 (2001) (citing RESTATEMENT (SECOND) OF CONTRACTS § 251 (1981) ). 

16 
We are not persuaded by UHP's intimation (as we understand it) that it 

demonstrated forbearance in the face of the government's refusal to pay its invoices, or 

that it only said that it would "suspend" performance until the payment issue was 

resolved, presumably in its favor (see, e.g., app. opp'n at 12; app. mot. at 44-45). 

UHP's use of the word "suspend" does not weaken the government's position that 

appellant anticipatorily repudiated the contract, which requires the contractor to 

provide health-related nurse triage services on a "24/7" basis, without lapse. We find 

that the government has established a prima facie basis for terminating the contract for 

cause following UHP's anticipatory repudiation, and in§ III.B address whether UHP 

has shown this action was excused by the government's material breach. 

2. UHP 's Alleged Material Breach of Contract by Abandonment of 

Performance 

The government next moves for summary judgment on the basis that UHP 

materially breached the contract by abandoning performance (gov't mot. at 31-35). The 

government has met its burden of proof by demonstrating undisputed material facts that 

appellant prematurely and without government assent ceased to provide agreed-upon 

nurse triage services. Appellant's withdrawal of telephone access violated multiple 

contract provisions. These included CLIN 0001, which required UHP to perform a 

"Nurse Triage Answering Service on a 2417 basis" during the base period of 1 October 

2011-30 September 2012. The PWS contains several provisions which consistently 

reinforced CLIN 0001; see, e.g., PWS iii! 1.1.2, 1.1.6, 1.14, 1.2.6, and PWS if 2.0, which 

set a 100% performance threshold with respect to PWS iii! 1.1.2 and 1.2.6 and other 

requirements. Taken together, these emphasize UHP's duty to provide prompt and 

uninterrupted nurse triage services by means of a valid telephone number on a "2417" 

basis during the period specified in the contract. (SOF iii! 1, 4, 14, 16, 28) 

The government has met its initial burden of proof by showing that appellant 

refused to continue performance, and has established a prima facie basis for terminating 

for cause. See, e.g., General Injectables & Vaccines, Inc. v. Gates, 519 F .3d 1360, 1363 

(Fed. Cir. 2008) and Precision Standard, Inc., ASBCA No. 59116, 15-1 BCA if 36,040 

at 176,028. We find that uncontroverted facts establish that UHP repudiated the contract 

by abruptly ending performance on 2 February 2012 when the government did not 

acquiesce to appellant's demands that its invoices be paid by 3 February 2012 (SOF 

iii! 34, 38). This is sufficient to meet the government's dual burdens of justifying 

termination of the contract for cause, and showing undisputed material facts supporting 

summary judgment. We consider in§ III.B whether UHP's repudiation may be excused. 

UHP challenges the government's termination of the contract as procedurally 

flawed. It contends that the government "failed to execute 'Cure' procedural 

requirements" (app. mot. at 14), and denies that the government's "show cause" notice 

and CARs were an adequate substitute for a 10-day cure notice (id. at 57). It is 

17 
unnecessary that we determine whether the "show cause" notice and CARs were an 

adequate substitute for a cure notice, as none is required for a commercial items 

contract. We have determined in§ II that the correct authority for the termination is 

FAR 52.212-4(m), and this provision does not necessitate a cure notice.4 

Pursuant to FAR 12.403(a), the requirements of FAR part 

49 do not apply when terminating contracts for commercial 

items. However, COs may use FAR part 49 as guidance to 

the extent that its provisions do not conflict with FAR 

12.403 and the provisions of FAR 52.212-4. We have held 

that the principles governing termination for default also 

apply to terminations for cause. 

Gargoyles, 13 BCA ii 35,330 at 173,412 (citing Genome-Communications, 11-1 BCA 

ii 34,699 at 170,889) (footnote omitted). In accordance with FAR 52.212-4(m), "the 

government has the right to terminate for cause in the event of 'any default' by 

appellant, or upon appellant's failure 'to comply with any contract terms and 

conditions,' or upon appellant's failure to 'provide ... adequate assurances of future 

performance.'" Gargoyles, 13 BCA ii 35,330 at 173,412. 

3. UHP's Alleged Failure to Meet the Contract's 100% Performance 

Threshold for Documenting All Billable Calls Justified the Termination for Cause 

The government captions its third argument for summary judgment as "UHP's 

Failure to Meet the Contract's 100% Performance Threshold for Documenting 'All' 

Billable Calls Justified the Termination for Cause" (gov't mot. at 35). It asserts that, 

even though this position was not articulated in the COFD, it is a legitimate basis for 

termination (id. at 3 8). The government argues that UHP failed to provide a daily 

summary and a monthly summary for "all calls" as required by PWS ii 1.1. 7. It 

criticizes UHP on two grounds: first, that appellant did not provide documentation for 

"all" of the calls included in its invoice (gov't mot. at 36); we evaluate this assertion in 

§ III.B. l. The second ground goes beyond this alleged deficiency, and extends to both 

the number and the content of the reports that UHP did provide. 

4 Even if FAR 52.249-8 Default (Fixed-Price Supply and Service) were the correct 

clause, the result would be the same. This clause also "permits a termination for 

default without a cure notice .. .in the event that the contractor 'fails to ... perform 

the services within the time specified"' in the contract. Greenleaf Distribution 

Services, Inc., ASBCA No. 34300, 88-3 BCA ii 21,001at106,100-01. Similar to 

Greenleaf, it was unnecessary for the government to provide UHP a cure notice 

as doing so may have effectively eliminated important services for an extended 

period. Id. 

18 
The government says that PWS ii I. I. 7 should be read in conjunction with PWS 

ii 1.1.5 Data Collection, "which required UHP to collect 22 points of data for all of its 

calls." PWS ii 1.1.7 "required two summaries, a daily summary and a monthly 

summary" that "had to have 'comprehensive documentation of all calls, to include 

patient demographics, caller concern, primary symptom, protocol used, and disposition 

for each call,' which is essentially the same data as the 22 data points required" by 

PWS ii 1.1.5. The government says that UHP had to provide a "summary of calls and 

each individual's patient triage documentation" to "the TOPA Flight Commander at 

the beginning of each duty day, which meant that UHP had to provide comprehensive 

documentation of all of the calls it serviced each day." The contractor also had to 

provide the CO's representative with "monthly comprehensive documentation of all 

calls taken to include patient demographics, caller concern, primary symptom, 

protocol used, and disposition for each call." (Gov't mot. at 36) 

According to the government, while "UHP only provided daily reports for calls 

referred to Urgent Care or Emergency," the contractor "had an obligation under the 

contract to provide documentation for all calls meaning all 355th MG beneficiary calls 

requiring clinical assessment" (gov't mot. at 37). In the government's view, UHP was 

to provide services "intended to assist with triaging non-life threatening situations and 

directing the appropriate level of care to resolve the medical issue," and had to 

document these calls in accordance with the contract (gov't opp'n at 36). While it 

does not disagree with UHP's assertion that it was not appropriate to obtain patient 

data from emergency callers, the government's rationale is founded in its contract 

interpretation and not in the law or medical protocols. It reasons that patient data is 

not required because callers with emergencies would "not fall under the compensable 

calls under the contract, i.e., calls requiring clinical assessment." (Id.) 

The government mentions another category of calls included in UHP' s invoices, 

which the contractor labeled as "TTL QM f/u/**Gen Q&A/**PT Ed Volume." It asserts 

that, to the extent that UHP believed that these calls were compensable, it should have 

provided "documentation [that] would have assisted the Air Force in inspecting the calls 

and determining whether they were acceptable under the contract.... Instead, UHP 

simply provided a daily and monthly summary of the number of calls that it said that it 

serviced" under various categories. (Gov't mot. at 37) 

The government cites its contractual authority to inspect services as a condition 

to accepting the work and making payment to the contractor. It alleges that appellant's 

failure to provide patient data from calls invoiced "did not permit the Air Force to 

inspect or accept UHP's services." It says that the contractor's refusal to "provide the 

comprehensive documentation required under" PWS ii I. I. 7 fell short of the "I 00% 

performance threshold requirement under the contract," and was "a material breach of 

the PWS and thus justified termination." (Gov't mot. at 37) The government denies 

"commit[ting] a material breach" by "ask[ing] UHP to substantiate its invoices before 

I9 
payment," and takes exception to UHP' s belief "that because it serviced calls that it 

should be paid for those calls without any validation" (id. at 45). 

UHP' s disputes the government's version of facts, and responds that it gave the 

government both the required reports and, as appropriate, the data called for by the 

contract. Appellant says that the "substantiation to the new level of details" demanded 

by the government "is an excessive and unnecessary inspection and contrary to FFP 

guidelines for simplified accounting and compensation." (App. opp'n at 13) 

According to UHP, the government's unreasonable interpretation of the contract 

renders the 100% performance threshold unattainable (id. at 6). Appellant says that it 

followed PWS ii 1.1.7 and "provided daily Triage medical record reports ... for Patients 

requiring and/or requesting Triage medical evaluations" as well as "a monthly report 

containing the comprehensive documentation of all calls by the 10th working day of 

each month" (app. mot. at 46). The contractor asserts that the government was not 

responsive to its repeated requests to resolve this issue (app. opp'n at 3, 13-14). 

The contractor asserts that collecting and providing all of the patient 

information required by the government was "unenforceable and prohibitive," as doing 

so would violate "laws and regulations" applicable to its medical professionals. 

Appellant alleges that documenting "the 22 items of Patient information of 'every call' 

and caller" in accordance with PWS ii "1.1.5 constitutes a violation of Public and 

Patient Privacy and Safety under HIP AA." The requirement that UHP document '"all 

calls' ... also violates the authority and jurisdiction of the Contract Office and Officers, 

as it related to Non-355th members and Non DMAFB personnel." (App. opp'n at 

11-12) UHP contends that it was prevented by HIPAA from providing PHI to 

government contract administrators, who "do not fall within the parameters of a 

Healthcare Provider or ancillary covered entities" (id. at 11 ). Appellant denies that it 

repudiated the contract, and characterizes the government's "refusal to address 

violations of Law created by [the government's] interpretation of the contract 

language" and its "failure to provide instructions and direction" as "an unequivocal 

and definite repudiation" by the government (id. at 11-12). 

Although the government did not rely upon this argument in terminating the 

contract, it is permitted to raise it on motion as we "may uphold a termination for 

default on any ground existing at the time of the termination." Kaman Precision 

Products, Inc., ASBCA Nos. 56305, 56313, 10-2 BCA ii 34,529 at 170,286. We have 

considered the parties' arguments regarding UHP's compliance with the 100% 

performance threshold set forth in PWS ii 2.0, and find that both parties fall short of 

justifying summary judgment. The government's argument goes to two aspects of 

reports that appellant was supposed to provide: whether it provided the correct 

number of reports, and whether each report contained the requisite content. Without 

more specific proof, the government failed to show that undisputed material facts 

support its argument that UHP did not document "all calls" in accordance with 

20 
PWS ~ I. I. 7. The government has not met its heavy burden to justify terminating 

UHP's contract for cause on this basis without benefit of an evidentiary hearing. 

Similarly, UHP failed to adequately support its motion by fact or by law; it has 

neither established that it provided all reports required by contract or that any missing 

content was appropriately excluded. Appellant has not established that its refusal to 

collect or report particular data was excused by law or applicable medical protocol, 

and does not explain the effect of the Business Associate Agreement entered into by 

the parties that governed the handling of PHI and its disclosure to the government (see 

SOF ~ I 7). We cannot on motion assess whether the government materially breached 

the contract by the manner in which it interpreted the contract. Nor can we assess 

from the record before us whether UHP reasonably interpreted the contract to preclude 

collecting and distributing certain information due to conflicts with outside medical 

protocols and laws, or whether compliance with these comprised a contractual 

ambiguity. Among other things, that would require that we evaluate extrinsic evidence 

which is not now before us and presents a mixed question of fact and law unsuitable 

for summary judgment. See, e.g., MIC/CCS, Joint Venture, ASCBA No. 58023, I4-l 

BCA ~ 35,678 at I 74,636. Triable issues remain regarding whether UHP provided all 

required information on all calls for which it billed the government, and whether it has 

been compensated for calls properly performed in accordance with the contract. 

B. UHP's Motion/or Summary Judgment 

The government established a prima facie case for terminating the contract for 

cause on the bases of UHP's anticipatory repudiation of the contract and abandonment 

of performance. The burden of production now shifts to UHP to show that its actions 

are excusable, or were caused by the government's material breach. DCX, Inc. v. 

Perry, 79 F.3d I32, 134 (Fed. Cir. I996), cert. denied, 5I9 U.S. 992 (1996). Appellant 

maintains that it attempted to resolve the "Government's misinterpretation of the 

contract language, which resulted in compromise to adherence and compliance to 

laws, regulations and safe Patient Practices." UHP says that the government refused to 

go beyond preliminary discussions, then "refused to address any aspect of the existing 

or additional issues of violation or language correction." (App. opp'n at 3) 

UHP's motion alleges over twenty instances of the government's material breach of 

contract to excuse appellant's prematurely ending the work and its alleged performance 

deficiencies (see, e.g., app. mot. at I 0-I I, 59). These allegations underpin two central 

arguments.5 The first is that the parties entered into a lump sum, firm-fixed-price contract 

in the amount of $254,259 with payment to be apportioned on a monthly basis independent 

5 We have discussed appellant's other primary contentions that the government 

materially breached the contract by failing to issue a cure notice in § 11.A.2 and 

wrongly withheld payment after requiring call documentation in violation of 

law and medial protocol in§ 111.A.3. 

2I 
of the number of calls (app. mot. at 35-36, 56; see also app. opp'n at 13-16), and that the 

government wrongly refused to pay for work performed (app. mot. at 25-28). The second 

argument is that the government negligently estimated the number of anticipated calls in 

the solicitation and contract (id. at 20-22). 

In order to recover on a breach of contract theory, appellant must show by a 

preponderance of the evidence that the government owed appellant a contract duty; the 

government breached that duty and caused damage to appellant; and the damage was 

reasonably foreseeable at the time of contract award. Edinburgh International, 

ASBCA No. 58864, 16-1BCA~36,227 at 176,743 (citing TRS Research, ASBCA 

No. 51712, 01-1BCA~31,149 at 153,874; and MA. Mortenson Co., ASBCA 

No. 53105 et al., 04-2 BCA ~ 32, 713 at 161,845). 

1. The Government's Alleged Material Breach of Failing to Pay UHP on a 

Lump Sum Basis 

UHP alleges that the government materially breached the contract by 

erroneously tying contractor payments to call volume (app. mot. at 56-58; app. opp'n 

at 6-7, 13-14 ). The contractor maintains that "the Air Force unreasonably required 

UHP to invoice the government on a monthly basis based on the number of actual 

calls," whereas "payments under firm-fixed-price contracts are not tied to an actual 

call volume [but] are based solely on the fixed amount provided for in the contract" 

(app. mot. at 56). 

UHP contends that "the contract and the SF 1499 compensation agreement was 

designated and designed to be a Firm-Fixed-Price 'lump sum' agreement 'not subject 

to any adjustment' of compensation amount" (app. opp'n at 13). It argues that "the 

contract is a firm-fixed-price contract that provides for a payment to UHP in the 

amount of$254,259.00 a year, or $21,188.25 per month, regardless of whether UHP 

received 1,500, 2,000, or 2,500 calls in a given month" (app. mot. at 56). UHP says 

that the government materially changed the lump sum contract by going to "a 'per call' 

reimbursement contract type" (app. opp'n at 12-13). Appellant argues that the 

"volume serviced under a Firm-Fixed-Price contract is not relevant to the payment 

amount, therefore, substantiation to the new level of details" demanded by the 

government "is an excessive and unnecessary inspection and contrary to FFP 

guidelines for simplified accounting and compensation" (id. at 13). To the extent that 

volume is relevant, appellant contends that the government's use of the automated 

T-Metrics system to track calls received by the contractor was flawed, as this did not 

record calls made to UHP's direct line (id. at 4). UHP cited its prior course of dealing 

in successfully providing nurse triage services under other government contracts, 

asserting that its compensation "had never been tied to actual call volume" in "nearly 

10 years of doing business ... under such firm-fixed-price contracts." (Id. at 15) 

22 
The government agrees with appellant that this is a fixed-price contract, but 

disagrees that it is in a lump sum amount (gov't opp'n at 20). Rather, it asserts that 

"UHP was to be paid a fixed price of $12.90 per unit or calls that it made in 

accordance with the contract" (id. at 7). The government maintains that "UHP's 

contract is a 'price per call' fixed-unit-price contract, not a firm-fixed-price lump sum 

contract" in which "payment was based upon the number of calls that UHP serviced in 

accordance with the contract requirements" (gov't mot. at 40). According to the 

government, it is not a material breach of contract to withhold payment for cause 

where appellant did not comply with contract requirements to document the calls 

(gov't opp'n at 44). 

Both parties' arguments rely upon language in CLIN 0001, which describes the 

"SERVICES/SUPPLIES" being procured as "Nurse Triage Answering Service[s]" 

(see, e.g., app. mot. at 56-58; gov't opp'n at 7, 19). The quantity is given as "19,710"; 

the unit as "Calls"; the unit price is stated as "$12.90" and the "AMOUNT" as 

"$254,259.00." On a separate line below the above information and before a summary 

of the work to be performed in accordance with the PWS, is the acronym "FFP," 

which indicates that this is a "firm fixed-price" contract. (SOF ~ 4) 

The Board resolves contract interpretation disputes by considering the 

document as a whole, harmonizing and giving reasonable meaning to all provisions if 

possible. NVT Technologies, Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 

2004). We find no contractual support for appellant's argument that this was a "lump 

sum" contract, nor does appellant effectively counter the fact that CLIN 0001 is stated 

in the unit price of $12.90 "per call." Instead, UHP relies on past experience under 

other fixed-price contracts in which it furnished the government with nurse triage 

services, none of which have been shown to be relevant or contain language similar to 

that used here. Appellant failed to prove that the government materially breached the 

contract by failing to pay UHP on a lump sum basis, irrespective of call volume. We 

deny summary judgment on this basis. 

2. The Government's Alleged Material Breach of the Contract by 

Negligently Estimating the Number of Calls 

UHP alleges that the government materially breached the contract by 

negligently estimating the number of anticipated calls that the contractor should expect 

as its workload. Appellant asserts that it relied to its detriment upon the projected call 

volume of 19,710 as stated in the solicitation and contract. It maintains that neither of 

these documents contains an exclusion as to the type of call, nor did these indicate that 

any of the calls included in the government-provided estimate would be 

non-compensable. (App. mot. at 20-24) UHP again references CLIN 0001, which as 

previously noted states a "quantity" of 19,710 and the "unit" as "calls" (SOF ~ 4). 

Appellant urges that this was a "Misrepresentation during the formation of the 

contract" (app. mot. at 31), and that under the government's erroneous interpretation of 

23 
the contract "approximately 70-80% of the total calls [it actually received] would be 

uncompensated" (id. at 21 ). 

The government denies negligently estimating the anticipated number of calls in 

the solicitation and contract. It asserts that if UHP "argue[ s] that it understood the entire 

19, 710 call volume to represent compensated calls," then this "ass um [es] that the calls 

received that were not to be charged to the contract under the PWS were in addition to 

the disclosed call volume of 19,710, rather than included in the 19,710 call volume." The 

government argues that this would constitute "a patent ambiguity evident on the face of 

the solicitation provisions, which imposed on UHP the duty to inquire." (Gov't opp'n at 

31-32) The government questions the number of compensable versus non-compensable 

calls that appellant claims it received, based upon the relatively small number of call 

summaries submitted by the contractor (id. at 33-34). It contends that UHP was told_ in 

PWS ,-r 1.2.6 that "[n]on-triaged calls requesting 355 Medical Group or beneficiary 

information will not be charged to the [government]" (gov't opp'n at 25 (citing R4, tab 1 

at 30)), nor would "patient follow-up calls" that were to be performed by the government 

pursuant to PWS ,-r 1.1.2 (gov't opp'n at 26). 

The government's estimate of supplies or services to be purchased is of 

significance for several varieties of government contracts, "as the quantity may impact 

both a contractor's capacity to supply the contract items and the price at which it 

agrees to supply them." Rumsfeld v. Applied Companies, Inc., 325 F.3d 1328, 1334-35 

(Fed. Cir. 2003). Even though an estimate is not a guaranteed level of work, the 

government is required to use care in estimating contract workloads, as the contractor 

is entitled to rely upon this information in preparing its bid or proposal. The 

government will be found liable where a contractor can show by a preponderance of 

evidence that the estimate was prepared in an inadequate or negligent manner, was not 

done in good faith, or was "grossly or unreasonably inadequate at the time the estimate 

was made." Medart, Inc. v. Austin, 967 F.2d 579, 581 (Fed. Cir. 1992). To prevail on 

its claim that the government materially breached the contract by negligently 

estimating the anticipated workload, UHP "must show '(a) misrepresentation in the 

Government proffered estimates, whether intentional or negligent, (b) reliance thereon, 

and (c) resulting injury."' American General Trading & Contracting WLL, ASBCA 

No. 56758, 12-1 BCA ,-r 34,905 at 171,638 (citing JA. Jones Mgmt. Services, Inc., 

ASBCA No. 46793, 99-1BCA,-r30,303 at 149,833). "The adequacy ofthe 

government's estimate is only tested by the relevant information reasonably available 

to it." American General Trading, 12-1 BCA ,-r 34,905 at 171,635 (citing Womack v. 

United States, 389 F.2d 793, 801 (Ct. Cl. 1968)). Although a "negligent estimate as to 

a material matter is a breach of contract," our next step is to ascertain the type of 

contract at issue, as "not all types of contracts are subject to such claims." American 

General Trading & Contracting, ASBCA No. 56758, 14-1BCA,-r35,587 at 174,378. 

Federal procurement regulations direct the CO to include provisions in the 

solicitation and contract that identify the contract type and specify the nature of the 

24 
parties' relative obligations. The FAR has specific clauses that must be included in a 

contract, depending upon the government's purchasing obligations. According to 

FAR 16.501-2(a), "There are three types of indefinite-delivery contracts: 

Definite-quantity contracts, requirements contracts, and indefinite-quantity contracts." 

A definite-quantity contract sets forth with precision the amount of goods or services 

the government will obtain within a fixed period. See FAR 16.502, Definite-quantity 

contracts. The instant contract does not stipulate a definite number of calls UHP is to 

handle, and thus is an indefinite-quantity contract. A negligently-prepared estimate 

does not give rise to a contractor's cause of action in a definite-quantity contract, as the 

government is obliged to procure a set amount of services or supplies. FAR 16.506(e) 

requires the government to insert FAR 5 2 .216-22, Indefinite Quantity into those 

contracts defined in FAR 16.504 as for an unquantified amount, but does not obligate 

the government to obtain all of its requirements from that vendor. According to 

FAR 16.504(a)(l), such a "contract must require the Government to order and the 

contractor to furnish at least a stated minimum quantity of supplies or services," which 

according to ii (a)(2) "must be more than a nominal quantity." The government will 

not be held liable for a negligent estimate in an indefinite-quantity contract, which 

guarantees only that the government will order at least a specified minimum quantity; 

any further ordering is at the discretion of the government. This minimum is an 

essential element, as otherwise the contract would lack sufficient detail to be 

enforceable and fail for want of consideration. Eastern New Mexico UniversityRoswell, ASBCA No. 57110, 12-2 BCA ii 35,090 at 172,337 (citing Mason v. United 

States, 615 F.2d 1343, 1346 n.5 (Ct. Cl. 1980); and Maintenance Engineers, Inc. v. 

United States, 749 F.2d 724, 726 (Fed. Cir. 1984)). 

FAR 16.506, Solicitation provisions and contract clauses, at ii (d)(l) requires 

the government to include FAR 52.216-21, Requirements, in those contracts which 

oblige the government to exclusively obtain the unquantified amount of "all" of its 

particular needs from the contractor within a fixed period. The government may be 

liable for a negligent estimate in a requirements-type contract, as bidders are entitled to 

rely upon a reasonable projection of anticipated work. See, e.g., American General 

Trading, 12-1BCAii34,905 at 171,635-36. 

There are other types of government contracts, not applicable here, that are also 

susceptible to breach claims when the government negligently estimates the 

anticipated quantity. There is no breach for a negligent estimate where the 

government includes a "clear and unequivocal" statement or other strong language that 

sufficiently tells prospective bidders to perform their own investigation, and warns that 

the government's estimate is not to be relied upon. See, e.g., Summit Contractors v. 

United States, 21 Cl. Ct. 767, 776 (1990). Even then, such disclaimers may be 

overridden and the government found liable if the "estimate is grossly erroneous or 

negligently prepared." Id. (citing Timber Investors, Inc. v. United States, 587 F.2d 472 

(Ct. Ct. 1978)). In any event, the contract with UHP does not contain a disclaimer 

regarding the estimate. 

25 
Contract interpretation begins with examination of the plain language of the 

written agreement. LAI Services, Inc. v. Gates, 573 F.3d 1306, 1314 (Fed. Cir. 2009). 

Contract terms are interpreted and read as a whole, giving reasonable meaning to all of 

its parts; where possible, we do so in a manner that does not leave "a portion of the 

contract useless, inexplicable, void or superfluous." NVT Technologies, 370 F.3d 

at 1159. "Pure contract interpretation is a question of law which may be resolved by 

summary judgment. Determination of the type of contract the parties entered into is 

generally a matter of law." Eastern New Mexico Univ., 12-2 BCA ii 3 5, 090 at 172,3 3 6 

(citing P.J. Maffei Bldg. Wrecking Corp. v. United States, 732 F.2d 913, 916 (Fed. Cir. 

1984); Textron Defense Sys. v. Widnall, 143 F.3d 1465, 1468 (Fed. Cir. 1998); and 

Maintenance Engineers, Inc. v. United States, 749 F.2d 724, 73 n.3 (Fed. Cir. 1984)). 

Neither UHP nor the government have sufficiently addressed this point in making and 

opposing these motions. The contract does not contain either FAR 52.216-21 

Requirements or FAR 52.216-22 Indefinite Quantity as called for by FAR 16.506. 

While this suggests that the contract was neither, further briefing is needed on this 

highly relevant point. 

However, for purposes of deciding UHP's motion, we adopt the approach taken in 

American General Trading, 12-1 BCA ii 34,905 at 171,636, and continue our analysis of 

UHP's motion. "Without deciding upon the nature of the contract, for purposes of ruling 

upon the parties' cross-motions we give the benefit of the doubt to" the contractor "that 

the contract is one that is subject to a breach claim based upon negligent estimates." Id. 

We assume arguendo that a negligent estimate could be a material breach of its contract, 

and examine UHP's contentions in support of its motion. UHP cites Tzell Airtrak Travel 

Group Corp., ASBCA No. 57313, 11-2 BCA ii 34,845, in arguing that a material 

misrepresentation of compensable calls would excuse its repudiation of the contract (app. 

mot. at 21-22). The Board held there that: "A contract is voidable if a party's 

manifestation of assent was induced by either a fraudulent or a material misrepresentation 

by the other party upon which the recipient was justified in relying." Tzell, 11-2 BCA 

ii 34,845 at 171,409-10 (citing RESTATEMENT (SECOND) OF CONTRACTS § 164 ( 1981 ); 

Barron Bancshares, Inc. v. United States, 366 F.3d 1360, 1381 (Fed. Cir. 2004); 

T. Brown Constructors, Inc. v. Pena, 132 F .3d 724, 729 (Fed. Cir. 1997); see also Morris 

v. United States, 33 Fed. Cl. 733, 745 (1995)). 

Analyzing UHP's contentions that the government negligently estimated the 

anticipated workload discloses that the contract lacks terms required by the FAR to 

define contract type. Should the contract lack sufficient terms to be enforceable, then 

it is voidable. Tzell, 11-2 BCA ii 35,845. There is also the question of what the 

government intended to include in its estimate, and further amplification is needed as 

to contractual terms and UHP's reliance on the approximated workload. "Although 

contract interpretation is generally considered a legal question susceptible to summary 

judgment, there are situations in which it requires the resolution of factual issues." 

Kaman Precision, 10-2 BCA ii 34,529 at 170,286. That is the case here; further 

26 
investigation is required, as the record is not sufficiently developed to warrant 

summary judgment on this point. 

CONCLUSION 

Neither party has established undisputed material facts to fully support its motion 

for summary judgment, despite each having put forth multiple theories. The government 

made a prima facie case that UHP threatened to end and then untimely ceased 

performance. However, we are required to construe disputed material facts in favor of 

the non-movant, and UHP demonstrated that there are triable issues regarding the 

repudiation and abandonment that preclude judgment for the government. UHP further 

raised factual and legal issues that require further development of the record with respect 

to whether the government is liable for negligently estimating the workload. Also, the 

contract's seeming lack of salient terms raises the question of whether the parties had an 

unenforceable contract that would allow UHP to withdraw from the agreement without 

giving rise to liability for repudiation. Further, triable issues also remain regarding 

whether UHP has been fully compensated for work properly performed under the 

contract. 

We have considered but find it unnecessary to more fully address the remaining 

arguments advanced by the parties, none of which merit summary judgment for its 

proponent. Many of those advanced by appellant center upon the government's alleged 

breach of the duty to cooperate, arising primarily from the parties' disagreements over the 

issues addressed in this decision, and it is unnecessary to analyze these in further detail. 

Nor has UHP met its burden of establishing by undisputed material facts that the 

government acted in bad faith. "In alleging bad faith by the government, appellant must 

carry a high burden to overcome the government's presumption of having acted in good 

faith. To carry this 'high burden,' requires a showing by clear and convincing evidence that 

a contracting officer acted with the specific intent to injure appellant." SAi Construction, 

Inc., ASBCA No. 57693, 14-1BCA~35,762 at 174,987 (citing Road and Highway 

Builders, LLC v. United States, 702 F.3d 1365, 1368 (Fed. Cir. 2012); and Am-Pro 

Protective Agency, Inc. v. United States, 281F.3d1234, 1239-40 (Fed. Cir. 2002)). 

Despite its prima facie showing, the government has not established by "good 

grounds and on solid evidence" that it justifiably terminated the contract for cause because 

questions remain on whether this was an enforceable contract. See, e.g., Lisbon 

Contractors, 828 F.2d at 765; JD. Hedin, 408 F.2d at 431; see also Tzell, 11-2 BCA 

~ 34,845 at 171,409-10. UHP has not established, as it must to obtain judgment, by 

undisputed material facts that the government materially breached the contract. See, e.g., 

Mingus, 812 F.2d at 1390. 

27 
CONCLUSION 

The parties' cross-motions for summary judgment are denied. 

Dated: 17 May 2016 

I concur 

Administrative Judge 

Acting Chairman 

Armed Services Board 

of Contract Appeals 

Administrative Judge 

Armed Services Board 

of Contract Appeals 

I concur 

RICHARD SHACKLEFORD 

Administrative Judge 

Vice Chairman 

Armed Services Board 

of Contract Appeals 

I certify that the foregoing is a true copy of the Opinion and Decision of the 

Armed Services Board of Contract Appeals in ASBCA No. 58123, Appeal of United 

Healthcare Partners, Inc., rendered in conformance with the Board's Charter. 

Dated: 

28 

JEFFREY D. GARDIN 

Recorder, Armed Services 

Board of Contract Appeals